Half of Bandcamp staff laid off

[merlyn]

A country goes broke when it defaults on its national debt. The US is nowhere near that point. You might have wondered who the national debt is owed to. It's owed to anyone with money who buys government bonds. Governments borrow money by selling bonds, and paying interest on those bonds. Bonds are usually a safe option, as countries don't often go bust, although I noticed the US's credit rating was downgraded from AAA to AA+. Germany, Denmark, and other countries are still AAA. The UK is AA. Not sure how meaningful ratings actually are, as the financial products that crashed the economy in 2008 were given an AAA rating, due to corruption at the ratings agencies. I.e. "give us an AAA, or we'll take our business elsewhere". Ain't the free market great?

The US national debt is 32.6 trillion dollars. It sounds like a lot, and it is a lot, but the US is a big country with a big economy, and it makes more sense to give the national debt as a percentage of GDP.

The national debt has been over 100% of GDP before, at the end of the Second World War. Bad stuff happens, and the government borrows money to get the economy out of a hole. That's Keynesian economics. There is a precedent for reducing the national debt, as seen in the period from the 50s to the 70s. To reduce the national debt, the government has to run a budget surplus, i.e. take in more tax than it spends. The US isn't broke if it has a GDP of 26 trillion dollars in 2023. It needs to balance its books.

You can have a go yourself :

In 2019 the cost of the national debt was 327 billion. The problem is the deficit, which is the difference between the amount of tax collected and government spending. What would you do?

To me, the obvious solutions are to cut defence spending or collect more tax. Now, I'm not suggesting you pay more tax. Get the tax from the rich, who can afford it. Taxes can either be progressive or regressive. With a progressive tax, the more a person earns, the more a person pays. Regressive taxes disproportionately hit the less well off. Like in the UK VAT (value added tax) is a flat rate -- it doesn't take into account how much a person earns. This is a regressive tax, as the poor pay more as a percentage of their income. The UK tax system is pretty regressive. There is duty on booze, cigarettes, and petrol which are regressive taxes.

Progressive taxes, then, are how to raise more tax without making the poor poorer. But then the rich whine. The snowflake rich don't want to make an appropriate contribution, and it becomes a political problem.

Where are you getting " the US is broke"? It sounds like something the right wing would say to justify cutting government spending. And that wouldn't be defence spending, again for political reasons.

[ForrestH]

The natural flow of money is from the poor to the rich, passing through the middle class along the way. Since money doesn't move downward except at noise level, the government must make up the difference¹, as the sun evaporates water off the sea to provide clouds and then rain and then rivers; unfortunately too much federal spending mostly directly to the rich: defense spending is part of that, but so is Medicare because the ACA didn't actually make care affordable.
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¹ All the more so since the demise of the family farm: farming is a bit like mining for gold, except that the gold is plants; the labor of plants in their own self-construction is so invisible that it never gets taken into account, nor the value of the solar subsidy that makes it possible, but you can do the math: the value of the solar subsidy is staggeringly high; since the farm owners are now corporations, it goes straight to the top of the economy without passing through the middle class.

[glowrak guy]

Where are you getting " the US is broke"? It sounds like something the right wing would say to justify cutting government spending. And that wouldn't be defence spending, again for political reasons.

The gubbamint is like a drunk husband, who recklessly spends his wife's money (the GDP) behind her back.
An entity or person is broke when they can't pay what they owe, with what they have. Continuing to acrue debt
when even more loans can be obtained, doesn't mean they are any less broke. A person or entity is not improving
their position by going further in debt, especially during heavy inflation with rising interest payments.
Just means they are stupid, and believe they are financially invincable. Like the drunk foolishly spending the wifes money,
those entrenched politicians foolishly spending the taxpayers money, will find it won't end well.

A fool whose stack of maxed-out credit card payments means the bills can't be paid, is broke,
and won't be less broke after getting yet another credit card, and repeating the cycle.

Mr Bezos, whose business started in a garage, with a family grub-steak, understands taxes.
He is moving from a state that has a massive inheritance tax, and a large state-level capital-gains-tax,
to a state that has neither, while also inviting with a lower property tax rate. Every billion counts!

I'm not a defender of defense spending on weapons that are superfluous, or don't work as promised. There are viable enemies willing
to start a war, the moment they detect a pre-determined strategic advantage. USA needs to replace old obsolete systems, to maintain
a genuine deterence, not one that worked twenty years ago. While also replacing corrupt people whether in uniform, in congress,
in the media, or in big pharma drug labs.
Cheers